Qingdao STR20 Natural Rubber Price Drops
Index
On May 20th, the Qingdao STR20 price index for natural rubber was $2280/ton, down $10/ton from the previous trading day.
Market Analysis
Futures Market:
Spot Market
Supply Side:
International: Increased rainfall in Thailand has led to higher tapping rates in the north, northeast, and east, nearing full-scale tapping. Tapping in the southern producing areas is progressing smoothly, with the overall tapping pace showing a significant improvement compared to the previous period.
Vietnam's tapping progress is steadily increasing. Weather in the main producing areas is generally suitable, and sporadic short-term rainfall has not affected operations. Overall, tapping in the southern main producing areas has reached about 70%, with Binh Duong reaching about 50%.
Domestic: Increased rainfall in Xishuangbanna, Yunnan, has alleviated the previous drought. Stimulated by prices, expectations for increased tapping volume in the producing areas are strengthening.
Local rainfall in Hainan has increased the impact on tapping operations, slowing the release of new rubber. High-priced spot transactions for concentrated latex are difficult, impacting the production profits of local processing plants and cooling their enthusiasm for bidding up raw material prices.
On the demand side:
It is understood that most semi-steel tire manufacturers maintained stable operations, while a few companies moderately adjusted production to alleviate inventory pressure, resulting in an overall stable but slightly weaker market.
Some companies raised product prices at the beginning of the month, but downstream demand weakened, leading to further weakening of shipments. To control high costs, some companies reduced output of low-profit products, resulting in increased shortages of standard models and limiting overall shipments.
Futures and Spot Prices Overview
Market Forecast
Today, the futures market fluctuated and weakened, with spot offers following suit. Increased supply expectations from domestic and international production areas are gradually materializing, and upstream factories' enthusiasm for purchasing raw materials has waned, leading to a slight decline in raw material prices. Market sentiment is cautious, with buyers selectively replenishing for immediate needs at lower prices. Actual trading activity is generally low, and the natural rubber market may experience a weak consolidation in the short term.
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